Despite a number of challenging years, there are significant opportunities for the offshore helicopter supply chain both, thanks in part to the growth of the renewables market.
A new five-year forecast released by Westwood Global Energy Group predicts a recovery in the offshore helicopter market after three years of decline. It expects offshore oil and gas helicopter expenditure to total US$16Bn between 2018 and 2022, growing at a 1% CAGR over the period. This modest rate of recovery has been anticipated by the supply chain and helicopter operators have restructured and reorganised.
Westwood also predicts notable changes in geographic focus, a preference for more efficient rotorcraft and new applications for helicopters in offshore renewable energy.
Global helicopter fleet utilisation hit a low of 54% in 2017 due to falling demand and increased supply from orders placed pre-downturn. Oil companies required fewer journeys offshore and as a result, many airframes were put into storage. In the large helicopter segment, the grounding of the H225 in 2016 resulted in a switch to other rotorcraft. While restrictions are now lifted, future utilisation in this segment will influence market recovery and is dependent on operator preferences for the >100 units that are presently not in use.
Looking forward, Westwood predicts global utilisation to pick up to an average of 59% for the medium and large helicopter fleet. It expects growth to come from new frontiers such as the Mediterranean, East Africa and Guyana rather than traditional deepwater areas of activity (Nigeria, Angola, US Gulf of Mexico and Brazil). This geographic expansion will require new bases being set up and the reallocation of unutilised units.
The offshore wind market also offers a significant opportunity for helicopter operators, with almost 6,000 turbines to be installed globally over 2018-2022 bringing the global total to 10,000 by forecast-end. Westwood expects US$119M of offshore wind related helicopter expenditure over the forecast, with a CAGR of 39%.
Westwood Global Energy’s head of offshore research, Steve Robertson, said “It’s clear from the figures that future demand growth for helicopter transfers will come increasingly from outside western Europe from areas such as the Middle East and Latin America, as well as from renewables.
“We don’t expect any great rebound in headcount in oil and gas production, and in drilling we predict 9,896 offshore wells to be drilled over the period, 12% less than between 2013-2017. All of this will decrease passenger transfer demand. The Middle East is a key hotspot for helicopter operations in the coming five years with a 20% increase in overall activity between 2018 and 2022. In Latin America, activity has nearly halved during the downturn, but will rebound quickly, primarily driven by activity in Brazil.
“Growth opportunities also exist elsewhere, particularly in offshore wind business. As the next generation of projects becomes commercially competitive and developers build further from shore, clusters of projects will likely share infrastructure and logistics. Helicopter operators that get in early will benefit from this future growth.”